Judge Orders Eli Lilly to Pay 2 Percent of Insulin Sales to Arizona Firm

A federal judge has ruled that Eli Lilly must pay 2 percent of its billions in insulin sales to business development service firm Research Corp. Technologies (RTC) because the drugmaker had signed a royalty agreement in 1992 allowing Lilly to use a specific strain of yeast to make the medicines.

Arizona-based RCT, which acquired the rights to the yeast from Pfizer in 1993, accused Lilly of using the yeast to make enzymes pivotal in its Humalog and Humulin insulin products, which earned a combined $3.9 billion in sales in 2020, according to court documents.

“Lilly breached its reporting and royalty payment obligations by failing to pay the 2 percent royalty owed for the net sales value of the diabetes drugs, so RCT is entitled to judgment as a matter of law as to liability,” U.S. District Judge Scott H. Rash wrote in his ruling, also noting that “damages [are] to be determined at trial.”

“We strongly disagree with the decision and vigorously continue to defend our positions,” Lilly said.